Gold Stocks Poised for Phase Change Similar to 2001-2003

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Kitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.

Huey lugs his cart of rocks out of a mountainside shaft

But currently we project an end to effective bubble making and thus, an end to the status of gold and the miners merely being leaders into new bubble phases. A fleeting phase from 2001 to 2003 saw the gold miners rise as unique equities within a global bear market.

There was the Continuum backing it up every step of the way… until 2022. Dangerously enough, if we have changed the massive bubble phase as I believe very possible, if not likely, herds… legions of market participants have been trained by the previous decades to believe that the market always comes back to new highs and well beyond.

But if yields top out will that not give additional fuel to bubble participants with respect to stocks? It may. Or it may not. NFTRH anticipated the disinflationary trend of 2023, which would give a Goldilocks bid to stocks . But at some point the next part of the plan is expected to engage and that would be uncomfortably low inflation, AKA a liquidity crisis and deflation scare.

The green segment of this chart shows that blessed period when most markets/assets were still in bear markets, but gold and gold stocks exited long bear markets. Gold stocks actually entered a bubble of their own in 2004 as they continued to out-perform the S&P 500 while under-performing gold.

As to the here and now, we gold stock bulls will want to see gold's ratios to stock markets stabilize and its trends vs. commodities continue to rise in order to engage a macro backdrop that will stun many with its power. Again, the macro we had for 20 years is not the macro we have today and going forward.

 

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